Entergy Louisiana, LLC, a unit of Entergy, Corp. has proposed converting its Little Gypsy plant from natural gas to petroleum coke and coal. The proposed 530 megawatt (MW) unit will utilize circulating fluidized bed technology. The Little Gypsy site is located next to the Mississippi River, about 30 miles west of New Orleans.[2]

The project has been opposed not only by a broad and vocal coalition of environmental groups, but also by industrial customers – led by WalMart – who argue that the project will lead to price increases for the foreseeable future.[3] Entergy filed an application for a PSD permit with the Louisiana Department of Environmental Quality, who issued a draft permit in May 2007. Entergy filed an application for a certificate of need before the Louisiana Public Service Commission in July 2007.[4] On Nov 8, the PSC unanimously approved the project, but postponed until June 2008 to consider a controversial proposal to charge Entergy customers while the plant is being built.[5]

In April 2008, the Sierra Club notified Entergy of its intent to sue the company under the Clean Air Act for exceeding the maximum allowance for mercury, lead, and arsenic emissions. As a result, Entergy is delaying construction of the proposed power plant to study potential emissions issues, and the company has requested a postponement in proceedings with the Louisiana PSC.[2]

On June 30th, 2008 the Sierra Club filed a lawsuit in state court challenging the Louisiana Public Service Commission's approval of Entergy Louisiana's plan to refit Little Gypsy plant.

On September 25, 2008, the Sierra Club submitted comments on the recently reopened draft Title V/operating permit. The Louisiana DEQ originally issued the permit in November 2007, but reopened it in response to a federal appeals court ruling in February 2008 to allow limits on mercury and other hazardous air pollutants.[6]

In response to the coal ash spill at TVA's Kingston plant in Tennessee in December 2008, local environmental groups again called for Entergy Louisiana to abandon its plan to retrofit Little Gypsy to burn coal. An Entergy spokesman said the company plans to sell the ash byproduct instead of storing it on side, making such an accident unlikely. However, critics still pushed for more information about the storage and use of the plant's coal ash and argued that Entergy would better serve its consumers by pursuing alternative energy sources.[7]

In February 2009, the Alliance for Affordable Energy and Sierra Club released a report to the Louisiana Public Service Commission. The report found that because of new carbon regulations expected from the Obama administration, plans to convert the plant would leave customers with higher bills. The report was written by economist James Metzger, who argued that investing in energy efficiency and renewable energy would be preferable to converting the Little Gypsy plant. The groups called on the PSC to withdraw its approval of the plant's conversion project.[8]

On March 11, 2009, the Louisiana PSC ordered Entergy Louisiana to suspend the Little Gypsy project, citing lower gas prices, escalating construction costs, and pending regulations of carbon regulations by the Obama administration. The PSC wants to discuss the economic viability of continuing the project at its next meeting in April.[9]

On April 2, 2009, Entergy Louisiana announced it had agreed with state regulators to delay the repowering project for at least three years. The decision was based in part "on significant uncertainties in the economics of the project," according to a company spokesman.[10]